Bank credit and productivity: evidence from Mexican firms

Available from: 
October 2013
Paper author(s): 
Mario Villalpando (Banco de Mexico)
Microeconomics - Competition - Productivity

Using a recent survey of Mexican firms, this paper provides empirical evidence for the hypothesis that bank credit improves the productivity of firms with investment opportunities. In average, firms with access to bank credit and investment opportunities are 50 percent more productive than other firms. Bank credit and investment opportunities are instrumented to overcome potential endogeneity biases of OLS estimates. The results are consistent with both OLS and IV estimates.


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Research section: 
Lacea 2013 annual meeting
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